Some Conservative MPs have sent letters of no confidence in Liz Truss over fears the Prime Minister will “crash the economy”, according to a former minister.
The pound fell by more than 4% over the weekend to $1.0327 — its lowest level against the dollar since decimalisation in 1971. It regained some ground to hit $1.075 just after 10am on Monday. Many experts have linked the slide to Chancellor Kwasi Kwarteng’s borrowing-fuelled spree of tax cuts.
An ex-minister in Boris Johnson’s government told Sky political news editor Agnes Chambre on Monday that some MPs have already sent letters of no confidence to 1922 Committee chairman Sir Graham Brady. For a confidence vote to be triggered, 54 letters would need to be sent.
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The former minister told Sky: "Liz is f*****... You cannot have monetary policy and fiscal policy at loggerheads. Something has to give... They are already putting letters in as [they] think she will crash the economy."
And Guardian political correspondent Aubrey Allegretti tweeted on Monday: "Fury from a Tory MP who says talk of no confidence letters going in is not misplaced. 'My colleagues will rule nothing in and rule nothing out,' they say. 'There will come a time where people have to say "I know it’ll make us look chaotic, but we can’t go on like this."'"
Last week Kwasi Kwarteng announced the biggest tax cuts in 50 years, with reductions in the top 45% rate of income tax, national insurance and stamp duty worth £45billion. The top 45p tax rate on earnings of more than £150,000 a year is to be scrapped, leaving the highest rate at 40p.
In his analysis, the New Statesman's senior editor George Eaton tweeted: "A graduate earning £50k will pay a *higher* marginal rate (51%) than someone on £150K (42%) A graduate earning £25k will pay a 40% marginal rate, just two points less than top earners."
Tory MP Mel Stride, who chairs the Treasury select committee, suggested Mr Kwarteng made a mistake on Sunday in signalling further tax cuts as the pound's value plummeted. “One thing is for sure — it would be wise to take stock of how through time the markets weigh up recent economic announcements rather than immediately signalling more of the same in the near term,” said Mr Stride.
Meanwhile the senior Tory backbencher Simon Hoare tweeted: “This is not good news. V worrying indeed.”
Labour's Shadow Chancellor Rachel Reeves has accused Mr Kwarteng of “fanning the flames” of the pound’s decline by indicating more tax cuts. She told the BBC: “The chancellor instead of doubling down on his position on Friday needs to now set out credible plans."
Ms Truss' official spokesman said he does not expect the Chancellor or Prime Minister to issue a response to the falling pound because they do not comment "on market movements or currency movements in that way". He added that the UK is "investing in its future through our growth plan, while remaining fiscally responsible and committed to driving down debt in the medium term".
The spokesman confirmed to the BBC that the UK government is sticking with its plan and he said interest rates are "a matter for the Bank of England". He also said inflation is "something we are very conscious of and the fact that it is a challenge that countries are seeing everywhere".
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